The crisis is caused by continued exploitation of the masses using poor economic policies, designed to benefit the rich by exploiting the poor. Proposing good policies will not affect power structure, and so these policies will not be implemented. The way out lies in halls of knowledge - universities. By teaching the truth, to combat the lies which support existing power configuration, we can create revolutionary changes.

2. Economic Crises & Solutions:
A Radical Perspective
Dr. Asad Zaman
COMSATS: Monday 10th Apr 2023
10am-1pm
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3. What are we trying to do here?
Everywhere you look, people are analyzing, diagnosing, and offering
solutions to our economic crises.
Should we add to the noise?
Is it POSSIBLE to take effective steps – or is it only possible to make
noise?
Are we battling windmills, and ignoring the real frontiers for action?
If so, WHY?

4. Insights from Marx:
Capitalism exploits labor, not by force, but by education labor to
believe in the necessity of its own exploitation.
Colonization extracts massive amounts of resources from the colonies,
by making them believe in FALSE economic theories.
Jason Hickel: Aid-in-Reverse: Rich Countries Invested USD 1.3Tr in
Poor, but Received USD 3.3Tr in Interest & Other Payments.
The solutions will be obvious to DECOLONIZED minds.
But COLONIZED minds look to the West for solutions, instead of the
Quran.

5. Problems are Obvious
Solutions are Obvious
Imports: USD 60 Billion Exports: USD 30 Billion
We must borrow USD 30 Billion. Lenders dictate terms which ensure
that we will remain enslaved economically.
See: What They Don’t Teach in Economics Textbooks
http://bit.ly/WEAtext
Michael Hudson first job at Citibank: Calculate Latin American
Countries ability to repay loans. RESULT: negative – They could not
repay existing loans, let alone new ones. OUTCOME: Major Loan
GRANTED. WHY? For CONTROL of economic policies.

6. How to Get Out of the Debt Trap?
Two Alternatives:
Increase Exports: Being pursued for decades without success.
Decrease Imports: The ONLY solution
Why are we so blind?
Throughout history, growth has come from developing ability to
manufacture domestically – NEVER from importing. Import Substitution
Instead, blindly following free trade recommendations has cause
collapse of industry after industry – set up and failed – could not
compete with imports. We cripple ourselves, following expert advice!

7. WHY do we pursue increased Exports?
Reason is NEVER mentioned in any textbook of International Trade.
Poor Countries export Agri Products and Import Industrial Goods.
Food is more expensive for the poor, and Industrial Goods are cheaper
for the rich.
We sell the food of our poor people to pay for comforts of the rich.
Import Substitution REQUIRES promotion of Domestic Demand – Use
demand generated by our masses, for cheap basic goods of low quality,
to take the first steps towards industrialization.
Prosperity of Masses is equal to prosperity of the nation.

8. The Solutions:
Bulk of Imports: Energy and Agri Products.
Short Run: Import Energy from Iran, Boost Agri Production by
eliminating Agri Mafia.
Long Run: Develop Domestic Energy Sources, Increase Agri yields –
lowest in the region. Create Barriers to Cheap Imports to allow
development of domestic capabilities.
But, these cannot be implemented. WHY? Opposed to Domestic Power
Structure, and Global Capitalism.
See: Impact of Colonial Heritage on Economic Policy in Pakistan
http://bit.ly/AZimpact

9. Instead: Washington Consensus
‫سبب‬ ‫کے‬ ‫جس‬ ‫ہوئے‬ ‫بیمار‬ ‫ہیں‬ ‫سادہ‬ ‫کیا‬ ‫میر‬
‫ہیں‬ ‫لیتے‬ ‫دوا‬ ‫سے‬ ‫لونڈے‬ ‫کے‬ ‫عطار‬ ‫اسی‬
RED HERRINGS: Fiscal Adjustment: Tax Reforms: Deregulation: Trade
Liberalisation: Competitive Exchange Rate: Privatisation: Removal of
Barriers to Foreign Investment: Financial Reforms
Dani Rodrik: Goodbye Washington Consensus, Hello Washington
Confusion. Review of World Bank’s Economic Growth in the 1990s:
Learning from a Decade of Reform (2005) concludes failures of these
policies everywhere, around the globe.

10. WB: The East Asian Miracle:
WB Book opens by saying that these countries created miraculous
growth. They violated EVERY rule in the playbook of WB.
HOWEVER – WB says that other governments SHOULD NOT follow their
example!!
Indeed, the goal of the book is to explain that their success occurred
DESPITE their violation of free market liberalism, and not BECAUSE of it.
WHY? … to sell us policies again our national interests.

11. Conclusions, so far:
We are still colonized: White Colonizers have been replaced by the
bureaucrats, trained in exploitation by the British.
There are TWO Pakistans: Rich and Poor live differently.
FIRST: we need independence, THEN we can make good economic
policies, which are more or less obvious.
How does this colonization work, after 1947?
How can we decolonize?
We take this up next.

12. Historical Mechanisms
Colonization is a mechanism for extraction of resources.
Jason Hickel: How Britain stole USD 45 Tr from India, and lied about it.
Stavrianos: Global Rift: Development/Underdevelopment are two sides
of same coin. Colonizers looted the world => rich, colonies => poor.
Colonial Institutions were set up to suppress dissent, and ensure
compliance of population by force.
CRUCIAL ROLE of the compradors – the coconut class. Hamid Dabashi:
Brown Skins, White Masks

13. The World Wars Sapped European Power
1944: Bretton Woods: USD becomes central global currency. End of Pax
Brittanica, Start of Pax Americana.
Early 20th Century: about 85% of globe under European domination. By
1950’s more than 90% of colonies were “liberated”.
Fromkin: A Peace to End All Peace: European powers planned for
liberation to create conditions which would keep colonies dependent.
Control of oil was central to their plans. Nation-states were set up in
ways to ensure that Western advisors would always be needed.

14. Transition to US Dominance:
Overt Colonization Abandoned
Coup 53: Crucial to the 20th Century. http://bit.ly/REZA53
Operation Ajax/Boot overthrew popular, democratically elected leader
Mosaddegh, and replaced him by USA/UK puppet Reza Shah Pahlavi.
This was done for control of Iranian Oil.
The concept of “regime change” was born. USA had explicit ambition to
replace UK as world leader. Direct colonization would have been
extremely unpopular. Indirect colonization via puppet regimes, and
control of military was MUCH cheaper and easier.
This is REAL economics, not the trash we teach in our classes.

15. Crucial Missing Element:
Colonization of Minds
Colonization is a process of mind-control. 1000 British bureaucrats
cannot run a country of millions.
Education is the key tool for mind-control. Economic theory is central.
Macaulay’s Minute on Education Spells out the goal of Western
education: To create a coconut class, which will admire, respect, and
revere the West, and have contempt and hatred for their own culture,
heritage, and race. Necessary to assist Whites in exploiting their own.
The Rushdie Complex: Shame (on his family), Midnight’s Children
(shame for his culture, people, nation), Satanic Verses (religion).

17. Strategies for Liberation/Decolonization
Major Mistake: Focus on Physical Power. This will be, and has been,
resisted with all the might of global capitalism. We have neither the
army, nor the votes, to achieve physical control of nation-state.
The Right Path: Focus on Decolonization of Minds.
Our modern educational process – a key to jobs and success –
continues to create Macaulay’s children: the coconut class. It creates a
deep inferiority complex in students, by teaching ONLY Western
achievements and knowledge.
The key class divide in Pakistan is: English-speaking versus the
vernacular class (urdu medium).

18. Decolonization of Minds: Overcoming
shock-and-awe of Western Knowledge

19. Decolonization of Minds
Islamic Version:
Learn that the Quran is the most valuable knowledge given to mankind
– complete and perfect guidance for all times. Far above anything
discovered by the West.
Destroy the idols of Western knowledge, which hold us in shock-and-
awe.
Javed Akbar Ansari is pioneer in this field, and his students are working
on antidotes to Western philosophy. But this work is too deep and
difficult to reach the masses.

20. Spiritual Disease:
When those who have been given the gift of complete and perfect
guidance from God, look to other sources, they disrespect God.
Central Problem Facing the Ummah: The Modern Mu’tazila
http://bit.ly/AZtmm
Ancient Mu’tazila put Greek Philosophy on par with the Quran.
Modern Mu’tazila put Western knowledge ABOVE the Quran.
This mindset is automatically created by modern (western) education.

21. Soft Power: Decolonize our
own minds FIRST – then we
can reach our students.
• Chains must be broken link by link – no
simple path to freedom.
‫ہے‬ ‫اور‬ ‫کوئی‬ ‫سوچتا‬ ‫مجھے‬ ‫کا‬ ‫اور‬ ‫کسی‬ ‫ہوں‬ ‫خیال‬ ‫میں‬
‫ہے‬ ‫اور‬ ‫کوئی‬ ‫آئینہ‬ ‫پس‬ ‫ہے‬ ‫عکس‬ ‫میرا‬ ‫آئینہ‬ ‫سر‬
• First, we start with some simple economic
lessons.

22. Is it “rational” to be a sociopath?
Homo Economicus: Cold, Callous, Cruel, Calculating
Cold – emotions have no influence on decisions.
Callous – indifferent to feelings of others.
Cruel – Friedman’s doctrine: Profits come first, No social responsibility.
Calculating: The Ford Pinto Calculations.
Question: Is a theory of “rational” behavior descriptive or normative?
Is this a GOOD normative theory?
Is it a GOOD descriptive theory?

23. Mystery: Global Acceptance of terrible theory
• Fails normatively and Fails descriptively.
Trace the roots of this idea:
Rejection of Christianity in Europe led to search for a new basis for
morals. Jeremy Bentham, self-styled prophet, created Utilitarianism.
Pleasure is good, and pain is evil.
Today, MUSLIM teachers teach innocent students that our goal in life is
to maximize pleasure from consumption.

24. Economics: Religion of Capitalism
Utility Maximizaton is the worship of Nafs.
Modern Economics is theory of Nafs-e-Ammara.
Islam teaches us how to make spiritual progress. In particular,
economic affairs are arranged to create spiritual progress to Nafs-e-
Lawwama and onwards to Nafs-e-Mutmainnah.
Zaman, Asad, Islam's Gift: An Economy of Spiritual Development
(January 13, 2019). American Journal of Economics and
Sociology, v 78 n 2 (2019): 443-491., Available at
SSRN: https://ssrn.com/abstract=3321866

25. Counter-Acting Colonization of Minds:
Replace Economics with Islamic Economics
See my ongoing course: A New Approach to Islamic Economics
Course website: http://bit.ly/IslamicEcon2023
First Live Lecture: Gratitude, Contentment, and Trust
Instead of teaching students to idealize Enlightenment Rationality,
teach them Islamic normative ideals.
This becomes possible once we realize that modern economics is
normative and not positive, and also that it teaches toxic norms.

26. Economics: Still a Branch of Moral Philosophy
We teach innocent students W=Marginal Product of Labor.
Learn to look behind the mirror. Where did this theory come from?
Marx accused capitalists of exploiting labor. Economists countered with
the argument that Both Factors, Capital and Labor are rewarded justly.
BUT this argument is TECHNICALLY wrong (also morally wrong).
Consider simplest production function: One Unit of Labor PLUS One
Unit of Land produces One Unit of Wheat.
MPL = MPK = One Unit of Wheat. But both factors cannot get one unit!
How will output be distributed? According to relative power!

27. The Labor Market
Classics: Free markets lead to full employment.
Keynes: GD ’29 created high and persistent unemployment. Keynes
argued that markets do not create full employment, so governments
should intervene.
Implication: Supply and Demand theory FAILS in the labor market.
Then: Why should it hold elsewhere? In fact, prices are determined as
markups over costs, NOT via Supply and Demand.
Chicago School launched Counter-Revolution against. Modern
economics continues to say free markets => full employment!

28. Hiding Capitalist Power: Supply and Demand!
How are prices determined? By market forces of supply and demand!
Alan Blinder: Asking About Prices. About 90% of firms set prices of their
products.
Naomi Klein: No Logo: Big firms create Logos, which make their
products unique, and enable them to make massive profits.
Textbooks: mention the monopolies set prices too high, but suggest
that this is the EXCEPTION. In reality, competitive markets are the
exception, monopolies are the rule.

29. Inflation: A Mystery to All
Friedman: Inflation is always and everywhere due to money – NO
“Monetary Policy Without A Working Theory of Inflation”, Daniel
Tarullo, x-Chair, Federal Reserve: “We do not, at present, have a theory
of inflation dynamics that works sufficiently well to be of use for the
business of real-time monetary policy-making”.
Real source of inflation: High Exploitative Prices charged by Business.
Impossible according to Supply and Demand Theory.

30. Corporate Profits: Massive Increase
Corresponding to Increased Global Inflation
But, the storyline is: Pumping money into the economy since 2008, led to sudden
inflation in 2020! See: Jon Stewart Versus Larry Summers on Inflation

31. Mystery of Inflation Targeting:
Central Banks abandoned Keynesian goal of full employment. Chicago
says that such attempts have no long run effects, but increase inflation.
Inflation Targeting led to the Great Moderation – low inflation, low
growth, moderate unemployment.
To understand what was REALLY happening, we need to look at another
graph

32. Labor Market Kept
Loose by Policy:
Capitalists Capture
ALL productivity
gains

33. Summing Up
Economic Theory is concealed moral philosophy – designed to justify
capitalism, and paint it as efficient.
Economic Theory creates major obstacles to understanding reality.
Real World Economics CANNOT be understood without the historical
context of political power and class conflicts.

34. So What is to be DONE?

35. First: Recognize our Enormous Responsibility
As teachers, we shape the minds, and the LIVES, of our students.
We teach them, DIRECTLY or INDIRECTLY, the goals of life: what is worth
striving for, and what is not.
In Economics, we teach them that the purpose of our lives is to
maximize pleasure from consumption.
This philosophy – utilitarianism – was born as a religion in Europe, after
rejection of Christianity.
We are teaching them to believe in the religion of worship of Nafs!

36. Understand the nature of “Social Science”
The Scholastics: Organize society on basis of Christianity: Biblical Fiqh.
Rejection of Religion => Secular Modernity: New Religion of West.
Organize a Godless society: Pursuit of pleasure, power, profits is
RATIONAL – because no empirical evidence for God, Judgement.
Human beings are animals. Our lives are meaningless.
We live in a jungle of fierce competition, governed only by survival of
the fittest.
These anti-Islamic conceptions underlie all modern social sciences,
including economics. We CANNOT teach this to our students.

37. Recognize and Reject Western Social Science:
Fiqh of Secular Modernity
The Puzzle of Western Social Science: http://bit.ly/AZpss
Origins of Western Social Science: http://bit.ly/IR3owss
Rebuilding Social Sciences on Islamic Foundations (Parts 1 & 2)
http://bit.ly/AZrss1 and http://bit.ly/AZrss2
Social Science consists of lessons derived from historical experiences of
Western societies. It teaches us how to organize our society on
European patterns. These are HIGHLY inappropriate for us.

38. Stop Poisoning Minds of Our Students:
What we currently teach is the prohibited Ilm-e-La-Yanfa’
We teach that the only precious knowledge in the world was created by
the West over the past three centuries. The Quran and Hadeeth are
IRRELEVANT for our modern lives.
We teach that all of our 1000+ years of intellectual tradition is useless
garbage – nothing they said was important or relevant.
We teach that our heritage, culture, religion, belong to the past. The
future belongs to the West. Our students must renounce their heritage,
and accept discipleship of the West, to have meaningful lives.

39. How to Counter This Poison:
Teach ABSURDITY of orthodox economics, and RESPECT for our
heritage, as a source of excellent ideas about economics.
In Economics, start by using the following two textbooks to teach Micro
and Macro.
The Macroeconomics Anti-Textbook: A Critical Thinker’s Guide
The Microeconomics Anti-Textbook: A Critical Thinker's Guide - second
edition by Rod Hill and Tony Myatt
First of Three Stages of the Ghazali Project: Tahfat ul Falasafa – see:
http://bit.ly/IR8RWW

41. What we need to do: Teach Economic
Theories WITHIN their historical context
This reverses the outcome of the Battle of Methodologies of the late
19th century, where mathematical and quantitative approach replaced
qualitative and historical approach.
Without history, it is impossible to understand economic theory.
Naomi Klein: The Shock Doctrine: The Rise of Disaster Capitalism –
taught me more economics than I learn in my Ph.D. at Stanford,
studying under Nobel Laureates.
WHY: Emergence of Chicago School theories was placed within
historical context. No history taught at Stanford. See: Education of An
Economist: http://bit.ly/AZeduc

42. Historical Context: Essential for Social Theory
We are not centuries behind the West. Rather, those trained in West
have been blinded to reality. Teach deeper understanding of the
modern world as follows:
Economic Theory is an attempt to understand historical experience. It
cannot be understood without reference to this experience.
Keynesian Economics cannot be understood without the Great
Depression.
Chicago School neo-liberal economics cannot be understood except as
a reaction to Keynes.

43. Alternatives to Social Science
Most Well Developed, Linked to Islamic Intellectual Heritage:
Recep Şentürk: Decolonizing Social Sciences: http://bit.ly/RSdss based
on multiplex approach, taken from our intellectual tradition.
AZ: Uloom-ul-Umran: Islamic Alternative to Western Social Science:
http://bit.ly/AZUUU based on parallels to Ibn Khaldoun study of social
change.

44. Show Importance and Relevance of Islam
What is the purpose of our lives? See: http://bit.ly/AZwya
How can we make best use of the precious few moments we have been
granted?
How does understanding ourselves help us to understand economics?
This becomes possible after replacing homo economicus with NORMAL
human behavior (not the idealized homo islamicus)
Critical Truth: We cannot maximize happiness by pursuing more and
more goods. Contentment is a state of the heart. See lecture on:
Gratitude, Contentment, and Trust: http://bit.ly/IslamicEcon2023

45. Replace Sociopath Homo
Economicus with deep
understanding of Human
Behavior
• Rothman, A., Coyle, A. Toward a Framework for
Islamic Psychology and Psychotherapy: An Islamic Model
of the Soul. J Relig Health 57, 1731–1744 (2018).
• Abdallah Rothman: Developing A Model of Islamic
Psychology and Psychotherapy.

46. How to Build an
Islamic Society
Today?
Capitalism constrains actions of US
Presidents. Obama could not fulfill
campaign promises against
interests of military-industrial
complex.
So, where is the room for action?
Islam is focused on communities,
and on unity of the Ummah.
Unique strength of Islam: tolerance
and diversity, unity while accepting
differences.

47. The Real Battleground is Knowledge
The ink of scholars is more precious than the blood of martyrs.
Islam came as a KNOWLEDGE REVOLUTION – Allah gave knowledge to
humanity which we did not have.
Teachers can impart this knowledge, which is just as revolutionary
today, as it was 14 centuries ago.
Knowledge = Power works in both directions.

48. Reversing the Great Transformation
Capitalism can only function in a market society – built on market
relationships.
An Islamic society, where all members are like parts of one body, is
anti-thetical to a market society.
We can weaken our ties to our roles, defined by capitalism, and
strengthen our relationships to roles and identities created by Islam.
Place our families above our careers. Specifics on how to build Islamic
Communities are given in: http://bit.ly/AZrgt

49. Appeal to teachers:
Do not accept role of second-class citizens in the world of knowledge.
This is not befitting to those who have given the most valuable treasure
of knowledge in possession of humanity.
The ink of scholars is prized above the blood of the martyrs.
We can launch a knowledge revolution within our classes, and become
leaders of the world in production of knowledge.
Western knowledge looks impressive on the outside, but is built on
wrong foundations, and easily attacked and destroyed.

50. Truth is a powerful weapon against Lies

51. Dua for End of Gathering:
The best dua is the dua which the Prophet ‫ﷺ‬taught us:
َ‫أ‬ َ‫ت‬ْ‫ن‬َ‫أ‬ َّ
‫ال‬ِ‫إ‬ َ‫ه‬َ‫ل‬ِ‫إ‬ َ‫ال‬ ْ‫ن‬َ‫أ‬ ُ‫د‬َ‫ه‬ْ‫ش‬َ‫أ‬ َ‫ك‬ِ‫د‬ْ‫م‬َ‫ح‬ِ‫ب‬َ‫و‬ َّ‫م‬ُ‫ه‬َّ‫ل‬‫ال‬ َ‫ك‬َ‫ن‬‫ا‬َ‫ح‬ْ‫ب‬ُ‫س‬
َ‫ك‬ْ‫ي‬َ‫ل‬ِ‫إ‬ ُ‫وب‬ُ‫ت‬َ‫أ‬َ‫و‬ َ‫ك‬ُ‫ر‬ِ‫ف‬ْ‫غ‬َ‫ت‬ْ‫س‬
Subhanakallahumma wa bi hamdika ashadu alla ilaha illa anta
astaghfiruka wa atubu ilayk
Transcendent are You, O Allah, and praise be to You as You praise
Yourself. I bear witness that there is no deity save You. I seek Your
forgiveness and I repent to You.
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